West Brook Isles Partner's 1, LLC v. Commonwealth Land Title Insurance Company , 163 So. 3d 635 ( 2015 )

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
WEST BROOK ISLES PARTNER'S 1, )
LLC, )
)
Appellant, )
)
v. ) Case No. 2D13-6165
)
COMMONWEALTH LAND TITLE )
INSURANCE COMPANY; NAVARETTA )
& NAVARETTA, ATTORNEYS AT LAW, )
P.A.; and STEPHEN NAVARETTA, )
INDIVIDUALLY, )
)
Appellees. )
)
Opinion filed April 24, 2015.
Appeal from the Circuit Court for Pinellas
County; Jack Day, Judge.
A. Christopher Kasten, II of Bush Ross,
P.A., Tampa, for Appellant.
Marie A. Borland and J. Scott Slater of
Hill Ward & Henderson, P.A., Tampa, for
Appellees Navaretta & Navaretta, P.A.
and Stephen Navaretta.
Shawn G. Rader, James E. Walson, and
Jennifer R. Dixon of Lowndes, Drosdick,
Doster, Kantor & Reed, P.A., Orlando,
for Appellee Commonwealth Land Title
Insurance Company.
LaROSE, Judge.
West Brook Isles Partner's 1, LLC (WBI), appeals the final summary
judgments entered in favor of Commonwealth Land Title Insurance Company, Navaretta
& Navaretta, P.A., and Stephen Navaretta, Esquire. We have jurisdiction. See Fla. R.
App. P. 9.030(b)(1)(A). WBI sued the appellees for a real estate transaction that
allegedly went bad. After carefully reviewing the record and with the benefit of oral
argument, we affirm. We write to explain why the applicable statute of limitations bars
WBI's claims.
In 2004, WBI purchased from TAJ Development, Inc., five parcels in an
undeveloped condominium project, Westbrook Isles. Allegedly, WBI thought it was
buying vacant, unencumbered raw land. WBI intended to build condominium units on
the land; but, if that was not economically feasible, WBI would develop the land for other
uses. Seemingly, TAJ also believed it was selling unencumbered raw land. However,
by virtue of a 1995 Fourth Amendment to the Declarations of Condominium, the parcels
rested in the condominium form of ownership. Indeed, Mr. Navaretta prepared and
recorded the condominium documents when he counseled the original developer, a joint
venture of WBI and TAJ. The joint venture was dissolved in 2003, and TAJ, the seller
here, acquired the parcels. The parcels remained undeveloped.
When WBI bought the parcels in 2004 from TAJ, Mr. Navaretta
represented WBI; he also served as Commonwealth's title agent. His law firm,
Navaretta & Navaretta, P.A., was the closing agent. Our record contains an August 25,
2004, title search report describing the property as phased condominium units. An
executed title commitment, dated August 25, 2004, describes the property as twenty
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condominium units in phases 2, 7, 8, 9, and 10 of Westbrook Isles Condominium. It
notes twenty 2003 real property tax payments for each unit.
The September 21, 2004, purchase and sale agreement refers to the
property as "Phases 2, 7, 8, 9, and 10 Westbrook Isles Condominium." The agreement
provides that "Seller agrees to sell, and Buyer agrees to purchase the Land, together
with all of Seller's right, title and interest (if any) in and to all easements, developments,
rights and permits and other appurtenances incidental to the Land." The agreement
addresses condominium dues and assessments. On September 29, 2004, Mr.
Navaretta sent the August 25 title commitment to Doug East, WBI's agent who had
signed the purchase and sale agreement. Mr. Navaretta also sent a copy of the title
commitment to TAJ.
On September 22 and 23, 2004, Mr. Navaretta sent Commonwealth the
metes-and-bounds descriptions for each parcel, "relevant to [the] title search." Our
record contains an unexecuted title commitment package reflecting these metes-and-
bounds descriptions.
The October 28, 2004, warranty deed, interestingly, notes that the
property is "[s]ubject to condominium documentation, restrictions, reservations and
easements of record . . . ." Our record includes the note of a TAJ representative
observing that the warranty deed needed correction to properly identify the property.
Although Mr. Navaretta testified that he was entitled to rely on the legal description that
the Commonwealth title search provided, he later realized that "the recording data was
not complete." He claimed that the conveyed property was phases and undeveloped
units of a condominium project.
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Mr. Navaretta rerecorded a second copy of the warranty deed on
November 4, 2004. A notation states as follows: "Subject to condominium
documentation, restrictions, reservations and easements of record, if any, and taxes
subsequent to December 31, 2003." The January 15, 2005, Commonwealth title
insurance policy describes the property as condominiums by phase. A March 2006
mortgage on the property, involving WBI and one of its members, also described the
property as twenty "units" within phases and buildings subject to a declaration of
condominium. Our record seems clear that at closing, WBI purchased condominiums in
a project yet to be developed.
WBI admits that it did not read the key transaction documents, claiming
instead that it relied on Mr. Navaretta and his law firm. Mr. Navaretta, for his part,
testified that WBI knew it was purchasing only phases in a condominium project.
After the October 2004, closing, WBI marketed the condominium units it
planned to build. By August 2006, however, souring market conditions compelled WBI
to abandon its sales efforts. When the 2006 mortgage was foreclosed in 2009, the
complaint described the property as twenty condominium units. WBI claims that in late
2010 it finally realized it did not own unencumbered raw land. WBI demanded relief from
Mr. Navaretta and Commonwealth.
In June 2011, Commonwealth sued WBI for declaratory relief. The
complaint alleged (1) that Commonwealth issued a title policy to WBI; (2) that WBI
submitted a claim alleging that the warranty deed's legal description was incorrect and
did not match the description in the policy; (3) that WBI claimed that Commonwealth
was responsible for the alleged failings of Mr. Navaretta and his law firm; and that
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(4) Commonwealth procured a corrective warranty deed with the policy's property
description and offered to record it to exercise its right under the policy to correct the
alleged title defect. Commonwealth asked the trial court to find that it had fully complied
with its policy obligations.
WBI filed a counterclaim against Commonwealth on September 16, 2011,
and joined Mr. Navaretta and his law firm as counterclaim defendants. WBI's Third
Amended Counterclaim included three counts against Commonwealth for breach of
fiduciary duty and constructive fraud as closing agent and breach of contract for the title
commitment; three counts against Mr. Navaretta for legal malpractice, fraud, and
constructive fraud in his capacity as WBI's attorney; and two counts against the law firm
for constructive fraud and breach of fiduciary duty in its role as closing agent. Mr.
Navaretta, his law firm, and Commonwealth pleaded an affirmative defense that the
statutes of limitations barred WBI's claims.
Absent tolling of the statute of limitations, WBI had two years from the
October 2004 closing to sue Mr. Navaretta. See § 95.11(4)(a), Fla. Stat. (2004) (two-
year limitation for professional malpractice, whether based on contract or tort). For the
constructive fraud and breach-of-fiduciary-duty claims against the law firm and
Commonwealth, WBI should have sued by 2008. See §§ 95.11(3)(j),(o) (four-year
limitations). For the breach-of-contract claim against Commonwealth, WBI should have
sued by 2009. See § 95.11(2)(b) (five-year limitation). WBI waited too long; it filed its
counterclaim in September 2011.
Mr. Navaretta, his law firm, and Commonwealth moved for summary
judgment, asserting that WBI's claims were time-barred. They argued that WBI knew or
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should have known by February 2005, when Mr. Navaretta sent WBI the closing
documents, and certainly no later than March 2006, when WBI referred to the property
in the mortgage as twenty "condominium units," that it had not purchased
unencumbered raw land. Even if WBI were deemed not to have known until March
2006, an outer limit of five years for Commonwealth's alleged breach of contract would
have been March 2011, months before WBI filed its counterclaim.
WBI maintains that the statutes of limitations were tolled because Mr.
Navaretta fraudulently concealed the fact that WBI was buying condominium units
rather than unencumbered raw land. WBI claims not to have discovered the problem
until nearly six years after the 2004 closing. According to WBI, Mr. Navaretta failed to
provide WBI a copy of the original title commitment for review prior to closing. WBI
insists that it did not have sufficient time or opportunity to review the closing documents
closely. WBI allegedly relied on Mr. Navaretta's statement that the documents were
proper and signed specific places indicated in the documents as advised.
WBI argues that Mr. Navaretta knew before and during the closing that
WBI would not have closed had it been aware that the purchase did not include the
land. WBI argues that Mr. Navaretta made a conscious decision to conceal the facts
because he wanted to get paid for legal and title work. WBI contends that its claim is
supported by the facts that Mr. Navaretta did not use the purchase and sale
agreement's legal description in the title and closing documents and that he improperly
corrected and rerecorded the legal description in the deed after the closing.
Unfortunately, WBI confuses fraud and fraudulent concealment.
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Our record contains no evidence that WBI told Mr. Navaretta that it
planned to use the property for anything other than condominiums. Doug East, WBI's
agent and contact person with Mr. Navaretta, testified that he could not recall whether
WBI asked Mr. Navaretta to clarify the nature of the interest WBI was purchasing. Mr.
East only "glanced at" the contract before signing it but did not pay attention to the
property description until later.
After the hearing, the trial court granted summary judgment and entered
final judgments in favor of Mr. Navaretta, his law firm, and Commonwealth because
WBI's claims were time-barred. On appeal, WBI argues that it did not know nor should
it have known that the land itself was not included. WBI argues that summary judgment
was improper because a material issue of fact remains as to when the statutes of
limitations began to run.
The statute of limitations for fraud begins to run when the plaintiff should
have discovered, exercising any diligence, that the allegedly fraudulent transaction was
suspect. Breitz v. Lykes-Pasco Packing Co., 561 So. 2d 1204, 1205 (Fla. 2d DCA
1990). Fraudulent concealment is markedly distinct; it focuses on subsequent actions
to keep the improper conduct shrouded from sight. "Generally, two elements are
required before the equitable principle of fraudulent concealment will be utilized to toll
the statute of limitations, to-wit: plaintiff must show both successful concealment of the
cause of action and fraudulent means to [achieve] that concealment." Nardone v.
Reynolds, 333 So. 2d 25, 37 (Fla. 1976), superseded by statute, ch. 75-9, § 7, at 20-21,
Laws of Fla., on other grounds as stated in Nehme v. Smithkline Beecham Clinical
Labs., Inc., 863 So. 2d 201, 207 (Fla. 2003), receded from on other grounds by
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Hearndon v. Graham, 767 So. 2d 1179, 1184-85 (Fla. 2000). Even if WBI was
unaware, or could not have been aware through the exercise of reasonable diligence,
that the property was encumbered by a condominium declaration when it bought the
parcels, there is no evidence of fraudulent concealment after the closing. To the
contrary, Mr. Navaretta sent all the closing documents to WBI. And, certainly by 2006,
WBI's own mortgage documents made clear that it did not own raw unencumbered land.
Where there was no active concealment and a party with the exercise of due diligence
could have discovered the facts, the statute of limitations is not tolled. Jackson v.
Georgopolous, 552 So. 2d 215, 216 (Fla. 2d DCA 1989). Accordingly, we affirm the
final summary judgments based upon the expiration of the statutes of limitations. We
affirm on all other issues without further discussion.
Affirmed.
CRENSHAW and SLEET, JJ., Concur.
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